Moodyï¿½s Triples Pension Debt Estimates

This is a big deal because Moodyï¿½s is changing the way they view public employee union pension obligations. What Moodyï¿½s is saying is that they will no longer use CalPERS numbers (CalPERS outlier smoothing policies that hide the true cost of the massive debt they believe taxpayers are obligated to pay) to compute state & local governments debt load. The formula CalPERS uses hides the TRUE cost by spreading debt over 20 -30 years, thereby only recognizing a fraction of their TRUE unfunded liabilities.

The Government accounting Standards Board (GASBy) has spent the past five years trying to provide a fair framework that would accurately account for pension debt. They made great progress in what is known as an ï¿½Exposure Draftï¿½ (rough draft) that would have provided increase transparency for public pension funds and especially public pension like CalPERS who like to make their own rules. They did make significant progress in that we are less than two years from municipalities disclosing pension debt on their balance sheet, as opposed to footnotes. Unfortunately, when you have the political muscle of the unions, as well as the 230 billion dollars worth of muscle (lawyers & lobbyists & control of politicians) CalPERS was able to water down the recommendations of what is supposed to be an independent agency.

But, NOW, both Fitch and Moodyï¿½s are picking up where GASBy fell down. They are saying that the California Bond ratings will be impacted by Californiaï¿½s unfunded pension liabilities - at both the state and local level. The headlines are that pension debt under the new rating model, as opposed to the CalPERS model, will at least double.

If the rating agencies double our debt load then increased bond rates are sure to follow. If increased bond rates are sure to follow then the cost of projects like the High Speed Rail are sure to increase. Just one more reason to pay attention to unfunded pension obligations.

Posted by Anti-PUBLIC unions
a resident of Another Pleasanton neighborhood
on Jul 19, 2012 at 10:17 am

The impossibility of sustainability has always been evident to anybody bothering to do the exponential growth in both dollars and years. It is wrong and misleading to ever use the 'UNfunded' word however. Anything in the world can be built or funded by doubling, tripling, quadrupling money endlessly. That is a NON-solution, since it is not a stable, fixed situation. Greedy want more on top of more, and faster, and earlier feeding of a beast that never reaches satisfaction. Only fools would attempt any 'fix' that always proves to only 'temporary'. The cup has a hole in it !! Time to get a new cup.
Now Compton has announced in September, they will be the 4th CA city to file bankkruptcy.
Next?

Posted by pensiontsunami dot com
a resident of Downtown
on Jul 19, 2012 at 10:28 am

Wait until the City of Pleasanton gets their CalPERS bill (Millions$$$ each year to make up the shortfall in pension funding)... Ouch! ... what services will they cut now ... it only gets worse people ... wake up!

By the way Compton is the fifth city to file bankruptcy - Vallejo, Stockton, San Bernardino, Mammoth Lakes ... and the beat goes on ...

Posted by pensiontsunami dot com
a resident of Downtown
on Jul 19, 2012 at 10:55 am

Ps... UC wants to raise tuition by $2400 as a threat to pass Gov Brown's Nov tax bill ... also US Postal Service will default on their $5.5B pension/healthcare annual payment on Aug 1st - guess who will be on the hook for that payment ... you guessed it THE TAXPAYER! ... what services will be cut? ... and the beat goes on

Posted by Anti-PUBLIC unions
a resident of Another Pleasanton neighborhood
on Jul 19, 2012 at 12:01 pm

At that same meeting, they gave huge raises to a list of Presidents, who also receive housing and car allowance to meet daily expenses... and approved spending on refurbishing 4 of 11 President's homes in the system.
Yes, tuition threats are their 'voice' in the 'campaign' for MORE MONEY ! ! ! Choices, choices, who wins, who loses, some get, some give. choices, choices...the winners seem to keep on winning and winning. But, the regents and legislature, keep making the same choices.

Posted by Auntie Publick Onion
a resident of The Knolls
on Jul 19, 2012 at 12:40 pm

The threat of UCs is not surprise, since we know that the liberal universite system is the attack arm of the Donkey Party Or should I say Donky Kong !!!

Choices are what makes America weak! Winners who win are paradoxical for winning and MORE MONEY !!!

The Great GasbY was once great but it exposes it's Exposure Draft and we're all in a lerch now. When will the unions no longer have a "voice" in the "campain" for more "money"? Then we will make the Grape GasBY great again ???

Posted by Klisvak
a resident of Castlewood Heights
on Jul 19, 2012 at 2:05 pm

Measuring unfunded pensions by a different model? Who cares? The money is not there. That's life. I feel for the people who worked all their life and believed that their contract with the City or their Union is cast in concrete. It is not and needs to be re-visited and reduced (re-negotiated). Just like the people who placed all of their money into their house hoping to sell it for a profit, to provide for their retirement. The housing market has shrunk, the houses are worth half of what they were and the people have to accept it. It is unfortunate.

BTW, I am registered Democrat and I HAVE always voted as such. I am NOT going to vote for any Democrat this election. I do not plan on switching my loyality. I will remain in the Democratic Party, BUT I WANT TO FIX IT, CONTINUE TO VOTE FOR IT AND HOPE FOR A CHANGE. A REAL CHANGE.

Posted by Mr. Mittens
a resident of another community
on Jul 19, 2012 at 5:03 pm

That's life! What are you going to do? Can't raise taxes. Guess we'll just have to keep cutting jobs of all the corrupt people who thought they could earn a decent living working for a city government. That's the best way. If I paid taxes -- and I didn't except for 2010 when I knew I was running for president -- I certainly wouldn't want them going for bloated public employees.

They don't know how to build things by themselves. The people I built my company with all went to private schools, never used a public library, always drove private roads, and never ever needed assistance from a cop. So, what do I owe the state?

Posted by Mr. Mittens
a resident of another community
on Jul 19, 2012 at 7:42 pm

I've voted Democrat almost all my life. Heck, I even voted for Obama! But not this time. I'm going to vote for myself and people like me until we repeal this terrible health care fiasco designed by the world's biggest moron.

Posted by Mrs Mittens
a resident of Downtown
on Jul 19, 2012 at 10:33 pm

Oh honey, you sound a little stressed out ... why don't you go out back and have a smoke, maybe light up a doobee ... since it's Thursday and your work week is over why don't you crank up Marine1 in the AM for a quick 18 at Andrew's ... Friday evening perhaps a good fundraiser and you can let loose with another one of those great stress relieving anti-business, let's raise taxes on the rich tele-prompter rants that always makes you feel better ... then maybe over the weekend we can hop on AF1 for a quick jaunt to the Olympics see your buddy Putin and that new guy in France ... we can be back by Monday AM ... and fit in a visit to "The View" and blame Bush for something ... I can tell you feel better already

Posted by liberalism is a disease
a resident of Birdland
on Jul 20, 2012 at 9:41 amliberalism is a disease is a registered user.

Which racist stereotype are you referring to? Certainly none mentioned in any of the posts above....maybe you meant the published references by the WH occupant in his memoirs about eating dog when he was younger, his drub use/abuse, or that he likes to play basketball?
You're right, those would be stereotypes had he not brought attention to himself as having these 'qualities'.

Posted by Kathleen Ruegsegger
a resident of Vintage Hills
on Jul 20, 2012 at 9:54 amKathleen Ruegsegger is a registered user.

Love how Mr. Mittens loves to keep the divide going; don't look for common ground, and by all means, ignore the trouble ahead.

It is interesting to me how so many editorials now are talking about the need for change. Today's Chronicle and Tri-Valley Times both addressed it today. NPR also has an audio clip. Happy to provide the links if anyone wants them.